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CBRE
publishes the Hong Kong Industrial MarketView Q2 2015.

Darren Benson, Executive Director, Industrial & Logistics, CBREcommented, “The
outlook for the industrial property market is mixed. On the one hand, the
continued weakness in the retail sector is causing a mild slowdown in high-end
warehouse demand but on the other hand emerging sectors such as self-storage
have been expanding quickly in the low-end flatted factory facilities.”

CBRE
Outlook for Q3 2015

There will be marginal increase in new warehouse supply in the next one to two years, but leasing opportunities

Rental growth in the flatted factory market is expected to continue before the revitalization scheme expires at the end of Q1 2016

As more factory buildings are converted to office use and become available on the leasing market, competition increases for some industrial/office (I/O) buildings. I/O rents are therefore expected to remain flat

CBRE
Highlights for Q2 2015

Occupier demand for warehouse space remained low in Q2 2015 due to the continued weakness in the retail market, pulling down average rents by 0.3% q-o-q, the first decline in over 5-years

Average warehouse rents registered a quarterly fall for the first time since Q2 2009, while rents for flatted factory buildings rose 1.8% in Q2 2015 following a 1.8% q-o-q increase in Q1 Rents in I/O properties were flat

Self-storage operators continued to be active in leasing space during the quarter